METALS MORNING VIEW 30/05: Metals off to a quiet, low volume start with China still on holiday
Base metals prices on the London Metal Exchange are split this morning, Tuesday May 30. Copper, lead and zinc prices are off 0.4%, 0.3% and 0.1%, respectively, with three-month copper prices at $5,642 per tonne. While aluminium prices are up 0.1%, nickel prices are up 0.3% and tin prices are up 0.7%.
With China closed for the Dragon Boat Festival, volume on the LME has been extremely low with just 731 lots traded as of 06:47 BST.
Gold prices are little changed this morning at $1,267.21 per oz, palladium prices are up 0.8%, silver prices are up 0.6% and platinum prices are bucking the trend with a 0.5% decline. Given the friction between European leaders and US president Donald Trump after the G7 and Nato meetings, it is surprising that gold prices have not picked up more.
Equities in Europe on Monday did not react too negatively to the rhetoric following the G7 and Nato meetings, the Dax closed up 0.2%, the Cac 40 was off 0.1% and the Euro Stoxx 50 was unchanged. This this morning markets in Asia are mixed, the Nikkei is little changed, the ASX 200 is up 0.3% and the Kospi is off 0.5%.
The dollar index is firmer at 97.71, this after last week’s low of 96.79 on May 22, conversely the euro is weaker at 1.1122, as is the pound at 1.2809, the yen is firmer at 110.98, while the Australian dollar is weaker at 0.7438.
The yuan has strengthened further to 6.8295, this has taken it out of the February to late-May range that centred around 6.8900 – this suggests the authorities have given the yuan a boost following Moody’s downgrade. The other emerging market currencies are for the most part slightly weaker today, suggesting there may be a degree of risk-off in the market.
Although markets are off to a quiet start, it is a busy day on the economic front, with Japan’s household spending disappointing – it fell 1.4% – but retail sales climbed 3.2%, the unemployment rate remained unchanged at 2.8%, while the Bank of Japan’s core CPI climbed 0.2%. European data includes German import prices and preliminary CPI, French consumer spending and GDP, Spanish CPI and US data includes personal income, spending and prices, composite house price index and consumer confidence. See table below for more details.
The base metals are for the most part consolidating with copper, aluminium, zinc and tin price rallies all paused with prices just below recent highs, while lead is attempting to rebound off recent lows and nickel prices are holding just above recent lows. The markets may now wait for further information out of China, which we should get tomorrow with the release of manufacturing and non-manufacturing PMI data.
Gold prices moved up above recent resistance on Friday May 26 and prices are holding on to those gains – given the frosty aftermath of President Trump’s trip to Europe and the fact he is returning to political heat in Washington over his dealings with the US Federal Bureau of Investigation, we would not be surprised to see gold prices remain bid. Silver and palladium are firmer too, while platinum prices are consolidating after recent gains.
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